Tag Archives: Barry Ritholtz

Four Ways Barry Ritholtz Says Amateur Investor’s Can Jiujitsu Professional Investors

Earlier this month, Barry Ritholtz of Ritholtz Wealth Management suggested in his Washington Post column that amateurs may be able to beat professional investors. Countering Charles Ellis’ suggestion that amateur investors are seriously disadvantaged as amateur football players would be against the pros, Ritholz opines that amateur investors “have enormous advantages of their own.”  He says investors “can jiujitsu . . . benchmarks, costs and fees, size, and career risk” that restrict professional investors and, thereby, achieve better results on their own. Each point is highlighted below.

  1. Benchmarks:  Ritholtz notes that comparisons to benchmarks, as well as related marketing considerations, can undermine the pros. “You,” the amateur investor, “can feast on Beta instead of starving on Alpha,” he says.
  1. Costs/Fees: Ritholtz describes finance industries fees as “an egregious drag on returns,” noting that “you can keep your [costs] cheap, while the pros cannot.”
  1. Time: “You can have much, much longer-term time horizons” than professional investors, according to Ritholtz. He suggests that “being able to think long term and have patience is a luxury the professionals do not enjoy.”
  1. Career risk: Ritholtz observes that career-related considerations for investors in most investment firms incentivize them to “manage risk very conservatively.” Partly for that reason, professional investors’ “own interests may not be those of their clients.” While professionals are restricted by the criteria that can influence their careers, amateur investors “get to set [their] own metrics.” He suggests the amateur has “an enormous advantage” in this regard, recommending, “figure out what your long-term financial goals are, then create a plan to achieve your objectives,” measuring success by progress toward the goals.

Ritholtz Not Worried About Yellen Or Bubble Talk

While pundits have been throwing around the term “bubble” throughout the stock market’s climb over the past few years, Barry Ritholtz doesn’t sound concerned that we’re in one.

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Sonders Talks Inflection Points, and Zweig’s Greatness

In a wide-ranging interview with Barry Ritholtz on Bloomberg’s Masters In Business podcast, Charles Schwab’s Liz Ann Sonders offers her take on the bull market, and a look at her early years working for the great Martin Zweig.
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Adjust The Nasdaq For Inflation? What’s The Point?

With the Nasdaq recently closing above 5,000 for the first time in a decade-and-a-half, bears have said that the index really should be adjusted for inflation to get a better assessment of where things stand, valuation-wise. Barry Ritholtz says that’s nonsense.

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O’Shaughnessy on Investor Psychology, Bond Market Trouble, and Why Value Wins

In a wide-ranging interview with Barry Ritholtz on Bloomberg View, quantitative investing guru James O’Shaughnessy recently talked about why human beings are such inferior prognosticators compared to computer models, what that means for investors, why stocks may well be safer than bonds over the long run, and why holding period duration is so critical.

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Correction Timing A Dangerous Game, Ritholtz Says

Trying to predict the next market correction? Barry Ritholtz has some advice for you: Don’t.

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Arnott Talks Indexing, And Why Wall Street Hates Math

In an interview with Bloomberg View’s Barry Ritholtz, Research Affiliates’ Rob Arnott recently talked about the fundamental indexing approach that he pioneered.
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